Important note: Information in this article was accurate in 2001. The state of the art may have changed since the publication date.

Reuters NewMedia - Thursday November 15, 2001
Edwin Chan

While the big foreign firms attach price tags of thousands of dollars a year to their drugs, upstart Shanghai Desano Co boasts it can make AIDS drugs that will cost cash-strapped Chinese sufferers just 3,000 yuan ($360) annually.

Little-known private firm Desano has applied for approval to begin making two such dirt-cheap alternatives, saying they are just as effective as patented versions, a senior company official told Reuters on Thursday.

"We have a clear advantage in terms of capital costs. Our product is definitely superior in terms of price," Desano's senior manager Li Jinliang said in a telephone interview.

"Outside of China, foreign drugmakers would make a loss selling at these levels -- we'll break even."

In contrast, Bristol-Myers Squibb sells two patented drugs Videx and Zerit for a whopping 870 yuan and 3,110 yuan per bottle respectively, enough for just two weeks.

COUNTER TO POLICY

If the government approves Desano's products, as Li is confident it will by early next year, it would seem to run counter to current policy.

A senior Health Ministry official said on Tuesday China had no immediate plans to allow production of generic AIDS drugs for the domestic market. Instead, it was negotiating a deal with foreign patent holders to bring their prices down.

State media have reported that officials have told Chinese pharmaceutical firms not to break Beijing's WTO commitments on intellectual property rights by copying foreign patents.

But Li said Desano's drugs, while modelled on patented formulas, are the culmination of two years of intensive in-house research. Desano currently operates a bioengineering and pharmaceutical development house staffed by 50 researchers.

"It's our own development, but of course we have to refer to related reports from foreign sources. We couldn't possibly start from scratch," Li said. "We referred to patents in this area."

LIFE AND DEATH

Smelling an opportunity, state-owned Northeast General Pharmaceutical Factory, which like Desano has been exporting raw drug components to South America and India for years, has also applied to produce generic variants of finished drugs.

"We now only export AZT. But we have applied for sales in China. Once approved, we will be able to open the domestic market as well," a Northeast General official told Reuters.

A Bristol-Myers spokeswoman said she was unaware of plans by any Chinese firms to market AIDS drugs to China's HIV carriers -- estimated at one million by the United Nations.

Health experts say the short supply and exorbitant cost of AIDS drugs in China are symptomatic of the government's slow response to a lurking HIV problem which the United Nations has reckoned will soon balloon into a major epidemic.

In China, the cost of a drug can mean the difference between life and death. Many AIDS victims find treatment scarce and prohibitively expensive, with a year's course of a cocktail of AIDS drugs used in the West often costing $10,000 in China.

But there are signs the government is starting to take the AIDS threat seriously and China's first national AIDS conference was held in Beijing this week, attended by top Chinese and UN health officials and major foreign drug firms. UN AIDS chief Peter Piot has urged China to bring the price of treatment down through negotiations with Western firms.

But some firms aren't waiting around to see if prospective neogotiations work out.

"China's AIDS situation is very murky in a lot of areas," Li said. "The government is heightening its awareness campaign and encouraging state enterprises to get into this field. A lot of firms are starting to eye this market."

"We're just waiting for approval before starting clinical trials," he said. ($1 equals 8.276 Yuan)

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